Wednesday, 7 May 2014

Michael Chender of SNL - Junior Exploration Down 40%

current exploration trends as suggesting a significant squeeze on potential future gold supply..............exploration activity by juniors – which historically have been the most significant finders of major new gold deposits, was down 40% last year as funding dried up. Indeed, many are struggling to stay alive, let alone spend more money on exploration...............What is also disturbing is that the proportion of spending on grassroots exploration as a proportion of the total spend has dropped from 40% to 30% as companies become more and more risk averse. It is also notable that exploration activity is becoming more concentrated in countries considered to have safer jurisdictions with the biggest proportion in areas like North America, whereas activity in some parts of the world – which might actually be geologically more likely to host major discoveries like Africa and Indonesia has been diminishing over perceived political risk.............With discovery rates falling precipitously we could see ahead only around one-third of the number of new ounces found in the boom years of the 1990s by 2025. .....................gold miners have been lowering the price at which reserves and resources are calculated. This is, in effect, reduces mine lives and this, in conjunction with lower exploration diminishing exploration returns, will only add to the longer term pressure on gold output. It is also taking far longer to bring a new mine on stream from discovery to production. Indeed, Chender said that in some cases this can be as long as 25 years given the huge economic and environmental hoops mining companies have to go through to get a new project off the ground.

Followers

United Kingdom Investors in Junior Gold Stocks - ISA Eligibility

United Kingdom (UK) Investors seeking exposure to Junior Gold Stocks may wish to ensure that profits are free of capital gains tax.

This can be achieved by holding stocks in an ISA account. Current allowances are over £10,000 pa for both yourself and a spouse if you have not already subscribed to cash ISAs.

Any "Main Board" stocks can be held. With regards to junior gold stocks referenced here this means you can hold any stocks listed on the Toronto exchange, ".TO" on stock ticker references within an ISA. Australian stocks .ASX can also be held within ISAs and this can give exposure to very junior companies, although the Australian market is an area I have not had much exposure to.

You will not usually be allowed to hold Canadian Venture exchange stocks, ".v" ticker references within an ISA account. AIM stocks are also now ISA eligible.

UK Investors can realise capital gains of approx £10,000 pa before capital gains tax becomes due, with two allowances for both yourself and a spouse and you may roll forwards losses.

I have found TD Waterhouse, now TD Direct in the UK to provide very easy dealing on the Canadian exchange. Therefore ensure you realise gains before the new April UK tax year within your allowance and consider realising losses to roll forward.

NOT SMALL PRINT - DISCLAIMER

At all times I may have invested in what I find, I may have identified the stock only to watch while I concentrate on other investments, I may have sold taking profits or losses. I am not an advisor. Although I attempt to find good information it may not be accurate. Links to other sites are of interest to me but I do not offer recommendation of their accuracy or agenda. If you want to invest in this area you must do your own due diligence, it is your money. You have not paid for my research or views.This is a very risky area and can really only be defined as speculation, not investment.